Transformed cells in vitro have significantly lower levels of cyclic AMP than comparable parental lines. The addition of cyclic AMP or dibutyryl cyclic AMP to transformed cells inhibits their growth and reverses some of the morphological abnormalities characteristic of transformed cells. Intracellular cyclic AMP levels fluctuate during the cell cycle with the lowest levels observed during mitosis. These in vitro studies suggest cyclic AMP is a regulating agent influencing cell growth and differentiation and that transformation to the malignant state involves a defect in the cyclic AMP system leading to low intracellular cyclic AMP levels resulting in uncontrolled growth. Cyclic AMP also inhibits the growth of tumor cells in vivo, however, analyses of tumors indicate that tumors have higher rather than lower levels of cyclic AMP as expected. It is proposed that: 1) the high levels of cyclic AMP in tumors is due to the environmental conditiojs in which the tumor cells are growing, 2) the cyclic AMP produced by the tumor cells is not retained but is transported or leaks out of the cells, and 3) the high extracellular cyclic AMP is advantageous to the growth of the tumor cells. Experiments are proposed to determine if high extracellular cyclic AMP levels exist in the area of the tumor and the tumor host, and if the cyclic AMP levels of tumor cells differ when grown under in vivo and in vitro conditions.